FG and Labour can’t blame FF for budget

COME back Fianna Fáil, all is forgiven.

Over the last 10 days the mask has completely slipped. Those who were elected to guide us out of the morass into which the country has sunk have been shown for what they are. And that unedifying sight bears a striking resemblance to what went before them.

Since soon after assuming office in March 2011, the Coalition partners have been accused of merely taking up where their predecessors in government left off. Some such criticism may have been unfair, but the formation and substance of the recent budget deals a fatal blow to any such defence.

Let’s look at the charges that were laid prior to the recent budget. For the hell of it, why not look at these charges in the most benign light possible.

On a macro policy front, there may well be a case that the Coalition had little choice but to follow the path beaten by Fianna Fáil. They inherited a banjaxed country — in hock to the Troika. They are, to a large extent, implementing policy with one hand tied behind their back.

If it wasn’t for the extravagant promises that had polluted the last general election, Fine Gael and Labour could claim that they are merely working within the constraints of the outside forces calling the shots.

The similarities with Fianna Fáil don’t end there. The current government has displayed an attitude towards protecting their own feathered beds that is straight out of a Charlie McCreevy guidebook. We were promised that the bright, shining lights of Fine Gael and Labour would pay more heed to duties than perceived entitlements of office. That was another joke. But let’s cut them some slack. They are human. Most of them are coming over the final hills of their career into the lush valley of State pensions, and a sense of insecurity kicks in. So they want to hold onto the material comforts which their predecessors enjoyed, and continue to enjoy, in retirement. Let’s for a second forgive them those personal failings.

Far less forgivable is what has been revealed since the delivery of a budget that was cruel, petty and completely lacking in imagination. And that is that politically this shower are guided by the same compass that Fianna Fáil and the Progressive Democrats displayed in running the ship of State onto the rocks.

Since the budget was delivered, it has emerged that the main focus in its formation was not economics at a time of living dangerously, or social justice at a time when some are suffering hugely, but electoral considerations.

The most damning indictment of the Coalition is the reported row between the parties over a proposed new tax for high earners. Labour party ministers wanted a 3% increase in the Universal Social Charge (USC) for those earning more than €100,000. It seems a relatively modest tax, and would contribute to the paucity of social solidarity so far seen in this crisis. From a political perspective, Labour ministers wanted something to show that those at the top were taking some of the hit.

High-earners could have shipped the extra few bob taken from their wages. Bord Gáis CEO, John Mullins, who earns €250,000 per annum (down from €400k in 2010), told Marian Finucane last Sunday that high-rollers like himself had been braced for the tax, and were, largely, accepting of it.

Not so Fine Gael. As far as the Blueshirt ministers were concerned this would make them look weak, and could be interpreted as breaking an election promise not to increase income taxes.

No, the only way the Fine Gael would go for such a move would be if there was a corresponding cut of 3% on basic social welfare rates. This would then see Labour breaking its pre-election pledge to maintain basic rates of social welfare.

There was no economic correlation between the two measures. One was not complimented by the other, nor dependent on the other.

In terms of social justice, connecting the two measures would have been regressive. The USC charge affected those at the top of society. For many of them there has been a drop of income in recent years, but in reality that has impacted not a whit on their lifestyles.

The social welfare cut would have hit those at the lowest rung of the socio-economic ladder. €6 when your income is €188 is a lot of money. The only connection between them was that Fine Gael wanted a tit for tat. If we have to hit those most likely to vote for us, then we want your crowd on social welfare to get a wallop as well.

The cynicism didn’t end there. Fine Gael proposed that an exception be made to the social welfare cut for pensioners. The Blueshirts know that pensioners vote more than any other cohort, so, by God, they weren’t going to discommode that constituency.

We now know that these changes never happened. Instead, Labour settled for extra tax being applied to the likes of capital acquisition tax. The economic correlation between income and capital acquisition taxes is beyond me, but then the budget had very little to do with sensible economics.

Far more to the point, when politics becomes the main compass for the budget, and both parties cling to their holy grails, it is those like the 77,000 families in receipt of the respite carer’s grant who suffer. The €205 cut to the grant is estimated to save €23m, small change in a budget concerned with raising €3.5bn.

“This budget is not about Fine Gael or about Labour,” Enda Kenny said on Tuesday. Well, unfortunately that’s exactly what it was about.

In this, the Coalition parties can step up beside their predecessors in Fianna Fáil and the Progressive Democrats.

Back when the Tiger was roaring, both of these parties used the exchequer to better their electoral prospects rather than setting out a long-term strategy for a better country. That approach has been laid bare as we sift through the wreckage of the economy. Taxes were cut and spending increased at every turn in order in a manner that best impacted on their respective electoral constituencies.

At least though, the departed denizens of Fianna Fáil and the PDs could claim ignorance. At least their hubris was based on a wider illusion that this was a great little country run by top-class people with big brains at a time of living extravagantly.

The current shower have no such defence. Dirty realism has come to our doors, and everybody knows just how bad things are. Yet, despite the posturing, the suffering of many, the dire prospects for others, the Government parties were primarily concerned with playing politics. The plight of the nation is all very well, but old habits die hard.

The cries from Government benches that Fianna Fáil landed us all in the mire were beginning to wear thin even before the budget, Since Dec 5, such cries are wholly redundant. The reality is that the Government is displaying, not just the same policies, or disconnect from the populace, but also the most odious characteristics that marked Fianna Fáil’s tenure in power through those crazy years.

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